ASEAN path to economic union muddied by S.China Sea

JAKARTA - Discord in Southeast Asia over how to deal with Beijing's claims in the South China Sea comes as the region struggles to overcome competing national interests and form a European Union-style economic community by 2015.

Political leaders and officials say the row may not directly affect plans by the Association of Southeast Asian Nations (ASEAN) for the economic integration of countries ranging from wealthy Singapore to impoverished Myanmar.

But what doesn't help is China's growing investment in the bloc's poorer members, which critics say gives it influence that it has effectively used to block a unified ASEAN stance in the South China Sea dispute. The South China Sea, which stretches from China to Indonesia and from Vietnam to the Philippines, lies atop what are believed to be rich reserves of oil and gas.

"It's not going to hold progress (on integration) hostage," ASEAN Secretary-General Surin Pitsuwan told diplomats in Jakarta, referring to a recent meeting in Cambodia, where rifts over the South China Sea prevented the group's foreign ministers from issuing a communique for the first time in its history.

"It is an early warning sign ... this will not be the last."

Southeast Asia is a hot destination for investors seeking returns that are drying up in Europe, still to recover in the United States and slowing in the rest of Asia.

Estimated net flows into offshore ASEAN funds stood at $1.4 billion in 2012 through June, according to data reported until July 10. By comparison, China and India offshore funds saw net outflows worth $1.6 billion and $185 million respectively.

Investors have high hopes for plans by the 10-member ASEAN for a single market and production base for a combined economy of $2 trillion, with free movement of goods, services, investment and skilled labour among 600 million people.

While there is consensus in ASEAN for economic union, the group struggles with political differences ranging from a land border dispute between Thailand and Cambodia to a cultural spat between Malaysia and Indonesia. The most destructive is the inability to deal with claims by four of its members, and China and Taiwan, in the South China Sea.

Since only some elements of the economic plan will be in place by 2015, such as zero tariffs, more developed members may have to push on with integration in a two-tier model, just as the European Union did, leaving the others at risk of missing out on regional investment.

ASEAN's older and more developed members are Singapore, Malaysia, Thailand, the Philippines, Indonesia and Brunei. Vietnam, Laos, Cambodia and Myanmar joined later.

The two-tier model could leave fringe members further exposed to influence from China -- and the United States -- as they seek influence through investment and diplomacy in a "Great Game" played out in the tropics.

China is already the top investor in Cambodia and Myanmar and is catching up with investment by Europe, Japan and the United States in the region overall.

"The difference is that China is giving something that Cambodia needs, while ASEAN is promising something that is abstract," said Aleksius Jemadu, dean of the school of political and social sciences at Pelita Harapan University in Jakarta.

"ASEAN countries will act based more on their domestic needs ... When this community is built we can't expect them to be in unison, just like what happened to the South China Sea."

ACRIMONY

At the Phnom Penh meeting of foreign ministers, some diplomats said Cambodia blocked the South China Sea dispute being put on the agenda at China's behest. Cambodian diplomats in turn accused the Philippines and Vietnam of trying to hijack the meeting.

China has maintained it wants to deal with the issue bilaterally.

The Philippines has said it deplored ASEAN's failure to address the row and criticised Cambodia for its handling of the issue.

Cambodia had GDP per capita of $900 in 2011 and foreign direct investment (FDI) of $800 million in 2010, according to World Bank figures. That compares to Singapore's $46,241 per capita and $39 billion in FDI.

The China Daily has said Beijing's investment in Cambodia from 1994 until 2011 was $8.8 billion.

Even without the economic and political differences, a lack of capacity among some of ASEAN's members is making it hard to implement economic agreements.

Completion of measures towards a single market in its 2010-2011 phase was only 49 percent overall, according to ASEAN's latest scorecard, with reform lagging in food and agriculture.

"Early achievements were based on low hanging fruit ... The process of transposing regional commitments into national laws is the biggest (challenge)," said Subash Pillai, ASEAN's director of market integration.

The Philippines struggles to send officials to meetings sometimes and can be slow making decisions, insiders say, and may even risk falling into the weaker group of Cambodia, Laos, Vietnam and Myanmar. These four are already being given more time to fully reduce tariffs.

"They might not be up to the same level," said Pillai.

A recent Reuters visit to Myanmar's central bank found just a few idle computers, a stark contrast to the soaring towers that control banks and policy in Singapore and Indonesia.

ASEAN MINUS X

The bloc's ASEAN Minus X mechanism allows "flexible" implementation of commitments, by enabling members to opt out of economic schemes if they are not ready.

This has already been used. Singapore and Laos are the only members pushing ahead with an agreement on education services. Six countries including Vietnam signed an agreement to link their stock markets by the end of 2011, to spur electronic cross-border trading, but only Singapore and Malaysia are implementing it.

"You cannot expect all countries to be moving ahead at the same time. The ones lagging behind will suffer," said another senior ASEAN official, who declined to be identified.

The South China Sea spat also shows the problems ASEAN has resolving major disputes. Unlike the European Union, an inspiration if not a model, ASEAN lacks elected members of a central parliament, a powerful executive body or a regional court to make law and enforce its will.

Instead, it has the Jakarta-based ASEAN Secretariat, a body with little clout.

"Without a strong central mechanism it is very difficult to coordinate and survey all the issues that could become big issues," said Surin.

The bloc will face further challenges as it tries to standardize customs procedures and open up protected industries such as financial services to competition from within. It has implemented free transfer of profits and dividends but needs to remove further barriers to intra-regional investment flows.

"They are behind schedule (on the economic community) and clearly not going to make it ... they are not going to see much action on services," said Hal Hill, professor of Southeast Asian economies at the Australian National University.

And China's expanding influence looms large.

"The Phnom Penh meetings in July were significant not just because China sought to divide ASEAN by leaning on Cambodia, but because China was happy to do so, so brazenly," said Bryony Lau, a researcher on the South China Sea for the International Crisis Group think-tank in Jakarta.

VIENTIANE, Laos—In meetings on Monday with President Benigno Aquino III, leaders of the European Union (EU), Switzerland and Norway declared support for an Asean approach to the territorial disputes in the West Philippine Sea (South China Sea).

Secretary Herminio Coloma of the Presidential Communications Operations Office told reporters that the European leaders indicated their support for a peaceful resolution of the territorial conflicts based on international law, which is the same as the Philippine position.

But any meeting with China, which is claiming nearly all of the West Philippine Sea, is not on Mr. Aquino’s schedule, Coloma said.

Aside from the Philippines and China, Vietnam, Taiwan, Malaysia and Brunei also have claims to parts of the sea.

Mr. Aquino is also expected to mention the matter when he addresses the Asia-Europe summit and is likely to discuss the territorial dispute during bilateral talks with the leader of Japan on Tuesday, Coloma said. Japan also has simmering tensions with China due to conflicting claims to East China Sea islets.

“There was an agreement that it is a matter of international interest considering that a significant amount of world trade passes through that body of water. And in particular, Switzerland and the EU, and to some extent also Norway, indicated their firm support for the Philippines in terms of our position that conflicts or disputes in that area are to be resolved peacefully and follow international law,” Coloma said.

“And in particular, there is firm support for an Asean-centric approach, which has always been the position of President Aquino considering that four out of the 10-member states of Asean have specific stakes in the West Philippine Sea,” he added.

China has taken the position that territorial disputes should be settled bilaterally.

President Aquino had trilateral meetings with Herman Van Rompuy, the president of the European Council, and Jose Manuel Barroso, president of the European Commission.

He also held bilateral talks with Norway Prime Minister Jens Stoltenberg and Swiss Confederation President Eveline Widmer-Schlumpf.

Coloma said the EU officials told Mr. Aquino that concerns about the Philippine aviation industry were technical and not political.

Philippine carriers have been banned from the European Union following the poor assessment by the International Civil Aviation Organization (ICAO) of the country’s aviation safety measures.

“It was emphasized by the President of the European Commission… that these are technical issues—technical issues involving safety standards and these are not political issues. And we acknowledge that we are addressing the technical concerns and that we are moving positively in the direction of addressing and resolving all of those concerns,” Coloma said.

The Philippines was assured that it would get “every measure of support” in meeting international safety standards, he said.

“Definitely, the present restrictions on our Philippine carriers would not promote the idea of increased tourist traffic between Europe and the Philippines. And so we would like to see an early resolution of the concerns of the ICAO and similar bodies like the US Federal Aviation Administration,” Coloma said.

MANILA - China is "temporizing" talks to craft a legally binding regional code of conduct aimed at reducing territorial and maritime conflicts in the South China Sea, an ASEAN diplomat said Friday.

The diplomat, who requested anonymity, said in an interview that China has indicated it is not yet ready to negotiate with the Association of Southeast Asian Nations.

"China is temporizing," the diplomat said. "ASEAN is ready but China is not. China says it is not yet in a position to make a commitment."

According to the diplomat, China wants an eminent persons group to draft the "key elements" of the proposed multilateral code.

"China apparently wants to start from a clean slate. But the Philippines rejects that. It's a waste of time," said the diplomat. "Those proposals I think are their way of delaying things."

"Given their aggressive actions in the South China Sea, of course China doesn't want to tie its hands. The code of conduct will tie its hands."

"ASEAN has done its part," said the diplomat, adding that ASEAN senior officials have already identified the "key elements" that will guide the 10-member association in negotiating with China.

Moreover, the diplomat said ASEAN has even finished consolidating its early draft. Indonesia circulated the so-called "zero draft" to ASEAN foreign ministers in September on the sidelines of the U.N. General Assembly in New York.

"Now it's up to China to also come up with its own main elements because when we formally sit down, we will present our position to them."

"We are waiting for China to indicate the date of the convening of the senior officials to draft the code. However, China is not rushing into it," the diplomat said.

ASEAN wants to start the negotiations "at the earliest opportunity," the diplomat said.

"We want the early convening of the negotiations. We are prepared to sit down with them," the diplomat said. "The ball is in their court."

ASEAN agreed in July to begin formal talks on a proposed code that will govern the behavior of claimants in the Spratly Islands, a widely scattered group of islets, cays, reefs, rocky outcrops, shoals and banks in the South China Sea.

The Spratlys are claimed in whole by China, Taiwan and Vietnam, and in part by Brunei, Malaysia and the Philippines.

Of the six claimants, four -- Brunei, Malaysia, the Philippines and Vietnam -- are ASEAN members. ASEAN also includes Cambodia, Indonesia, Laos, Myanmar, Singapore and Thailand.

Aside from the Spratlys, other contested areas in the South China Sea also include the Paracel Islands, over which the navies of China and Vietnam have come to blows in the past, and Scarborough Shoal, an outcrop north of the Spratlys that is hotly disputed between China and the Philippines.

ASEAN's proposed "key elements" of a regional code of conduct in the South China Sea between the ASEAN member states and China basically call on claimants to resolve the territorial disputes peacefully and exercise self-restraint.

According to ASEAN documents, ASEAN wants the code to encourage the claimants to work together to clarify the territorial and maritime disputes in accordance with international law, including the 1982 U.N. Convention of the Law of the Sea, to pave the way toward their full resolution in a peaceful manner.

It also wants claimants to commit in the code to respect freedom of navigation and overflight in the disputed sea.

Furthermore, ASEAN wants the claimants to respect the exclusive economic zones and coastal shelves of coastal states, and carry out cooperative activities to promote peace and prevent disputes from developing into conflicts.

In 2002, ASEAN and China signed a declaration calling for adoption of a code of conduct that would set out "norms, rules and procedures to govern the conduct of parties, to promote mutual trust, confidence and cooperation in the South China Sea."

AP FILE PHOTO
The Philippines got backing from five countries in its position on territorial disputes in the West Philippine Sea (South China Sea), a “huge victory” despite China’s fresh refusal to commit to a code of conduct in the sea, Malacañang said Wednesday.
China refused to discuss the territorial disputes during the Asean-China Summit, one of the highest-level meetings during the 21st Association of Southeast Asian Nations (Asean) Summit in Phnom Penh that ended on Tuesday.
But four Asean members claiming territories in the disputed sea—Brunei, Malaysia, the Philippines and Vietnam—agreed to hold talks in Manila on Dec. 12 to see how they could move forward discussions on their territorial disputes with China.
President Aquino, who on Monday publicly rebuked Cambodian Prime Minister Hun Sen on his statement that Asean leaders had agreed not to “internationalize” the disputes, convinced five other leaders on the wisdom of the Philippine position on the issue.
On the President’s intervention, Asean issued a joint communiqué expressing the 10-nation bloc’s desire for a peaceful resolution of the territorial disputes, officials said.
The joint communiqué, which did not carry Hun Sen’s statement, was issued at the close of the Asean-Japan Summit in Phnom Penh on Monday.
Aquino’s intervention
In wrapping up Asean’s meeting with Japan, Hun Sen, chairman of the Asean Summit and a close ally of China, said the Asean leaders had reached a consensus that the territorial disputes in the West Philippine Sea should not be “internationalized” and that discussions should be confined between the bloc and China.
Mr. Aquino intervened, saying no such consensus had been reached.
“For the record, this was not our understanding.” Mr. Aquino said. “The Asean route is not the only route for us. As a sovereign state, it is our right to defend our national interest.”
“We made our stand clear to all parties with sobriety, dignity and reason. In the end, we did not only deliver our message; we [also] convinced [no fewer] than five countries to agree with our position,” Mr. Aquino said on his arrival in Manila late Tuesday.
“Before, only two were talking about the importance of the (code of conduct). Now more are saying, ‘It’s about time formal talks on the code of conduct were started to avert tension in the future,”’ he said.
The Philippines, Brunei, Malaysia and Vietnam are pushing for a code of conduct with China to minimize the risk of violent confrontations in the West Philippine Sea, home to major sea lanes vital to global trade and where islets, reefs and atolls are believed to be sitting on vast gas and oil deposits.
China said earlier that it was willing to work on a code of conduct with Asean countries at the proper time, although it doubted whether the regional bloc was the proper forum for discussions on such a code.
Cabinet Secretary Rene Almendras, who accompanied the President to the Asean summit, declined to identify the five countries, saying the discussions happened at the retreat sessions. He said the five were not necessarily members of Asean.
International law
The Philippines stands for the resolution of the maritime disputes with China according to the United Nations Convention on the Law of the Sea (Unclos), which allows coastal states 370 kilometers (200 nautical miles) of exclusive economic zone.
Besides the Philippines, Brunei, Malaysia, Vietnam and Taiwan also claim territory in the sea.
But China insists it has sovereignty over nearly the entire sea and refuses to discuss the overlapping claims with its rivals on any international forum. It insists on one-on-one discussions with the other claimants.
Almendras confirmed that Asean had failed to get any commitment from China on the code of conduct. But he said Foreign Secretary Albert del Rosario would restart talks with his Southeast Asian counterparts soon.
Getting five countries to agree to the Philippine position was a “huge victory” given that it was facing Asia’s economic and military superpower, the President said.
“It was like a David and Goliath fight, but we stood our ground. Otherwise, who else could we turn to? Now they know: the Filipino will not back down if he’s in the right. The Filipino is good at associating with others, but we will not be oppressed,” he said.
Almendras said the exclusion of Hun Sen’s remarks from the postsummit joint communiqué was a “success” on the part of the Philippines.
Trip’s success
“I think, if you were to ask us what was the success of the Asean trip, it was precisely that—that in the final draft, at least the ones that was shown to us, and the ones that explained in the closing ceremony, that particular line that… there was an agreement that ‘South China Sea issues will not be internationalized’ was not included,” Almendras said.
“It’s not the end game. We know that it’s still gonna be a long discussion, long struggle, but at the very least, the Philippine position was made very clear to everyone. And we were very, very happy at the turn out of the support for the Philippine position during the East Asia Summit retreat session,” he said.
Almendras said that US President Barack Obama and other heads of state or government were “very attentive” when Mr. Aquino rose to dispute Hun Sen’s remarks and declared that Asean was not the only route available for the Philippines.* With reports from Tarra Quismundo and Michael Lim Ubac

By disregarding its passport, China has sparked a torrent of diplomatic protests. The new passport carries a map that shows China’s territorial claims in the South China Sea and on its border with India.

China did not need to occupy the disputed territories through invasion by the People’s Liberation Army. It did not have to fire a shot to validate its claims based solely on a map, making the whole affair a paper coup.

According to Bloomberg, three separate pages in the passport include China’s “nine-dash line” map of the South China Sea (parts of which are known in the Philippines as West Philippine Sea), first published in 1947. The dash lines extend hundreds of kilometers south from China’s Hainan Island to the equatorial waters off the coast of Borneo, Vietnam and the Philippines.

The map includes the Spratly island chain, the subject of overlapping claims by China, Taiwan, Vietnam, Brunei, Malaysia and the Philippines, according to the US Central Intelligence Agency website.

The Guardian newspaper in the United Kingdom reported that the Philippines, Vietnam, India and Taiwan had vehemently protested against the new passport, “which essentially forces neighboring countries to validate China’s position on contested regions.”

Vietnam and the Philippines have lodged formal complaints with Chinese embassies in Hanoi and Manila. India’s external affairs minister, Salman Khursid, called the map “unacceptable.”

Hi Yinhon, an international relations professor at Renmin University in Beijing, warned the row could have long-term consequences.

“Especially in the East and South China Sea, both sides have taken a confrontational approach,” Hi said. “This kind of situation will have a long-term impact on East Asian security and relations between these countries.”

Bruce Jacobs, a professor of East Asian studies at Monash University in Australia, said the map “underscored China’s increasing boldness in laying claim to the disputed territories,” adding that the country “lacked institution such as a free media that could keep its foreign policy decisions in check.”

US concerns

The new passport has raised concerns in the United States, which, while saying it is neutral in the territorial disputes, has been supplying the Philippines with military weapons to enable its Armed Forces to stand up to the increasing encroachment of Chinese maritime forces into territories in the sea claimed by the Philippines.

The United States said the map on the new passport was “causing tension and anxiety” among claimant states in the South China Sea.

Washington said that while it had no territorial claim, it had a national interest in the stability in a region vital to world trade and freedom of invitation in one of the world’s strategic waterways in both military and economic terms.

China heightened tensions in the region by announcing last week, following the issuance of the new passport, that it had granted Hainan’s border patrol police power “to board, seize and expel foreign ships illegally entering the province’s sea areas.”

The announcement came with an insult. The state-run Global Times said the power to board was granted to Hainan, implying that it was the police patrol of the provincial authority, not the Chinese Navy, that would enforce the new rules.

Asean worries

The Association of Southeast Asian Nations (Asean), which has been divided on how to deal with China in the territorial disputes, was so alarmed by the Chinese plan to board and seize ships, even those belonging to claimant nations patrolling their own areas, that Asean Secretary General Surin Pitsuwan warned that the plan was “a very serious turn of events.”

What if Philippine Navy or Coast Guard ships have an encounter with the Chinese patrol ships in the Spratlys or at Panatag Shoal (Scarborough Shoal)? The Chinese plan is fraught with risks; it could spark a war.

And this is what worries Asean.

The Philippines has refused to place its visa stamps on the new Chinese passports because that could be construed as recognizing the Chinese claims in the West Philippine Sea that the Philippines is disputing.

Instead, Manila will issue a separate visa form for Chinese nationals holding the new passports.

The Department of Foreign Affairs said the decision to issue a separate visa form reinforced the Philippine protest against China’s claims to territories in the West Philippine Sea.

Vietnam has also refused to place its visa stamps on the new Chinese passports, according to Al Jazeera, while Taiwan has objected to the maps’ maritime borders.

India, angered that the map shows its state of Arunachal Pradesh and the Himalayan region of Aksai Chin as Chinese territory, is issuing Chinese citizens visas embossed with New Delhi’s own version of the map.

Security alliance

In the wake of the revulsion at China’s acceleration of its land-grabbing in the South China Sea, an ad hoc security alliance is emerging among Japan and the Asean claimants, including the Philippines and Vietnam, to block China’s assertive interventions through diplomacy or possibly by other means. China’s moves have compelled these states to close ranks.

The map on China’s new passport does not include islands in the East China Sea that are claimed by both China and Japan. Tough negotiations have been taking place in which Japan has been standing up to Chinese pressure.

Japan is the only naval power in East Asia that can face off with the burgeoning naval power of the People’s Liberation Army.

In a recent article, the International Herald Tribune reported that Japanese officials say Japan has been “building up ties with other nations that share worries about their imposing neighbor.”

They acknowledge that “even building the capacity of other nations’ Coast Guards is a way of strengthening those countries’ ability to stand up to any Chinese threat.”

The report quotes Yoshide Soeya, director of the Institute of East Asian Studies at Keio University in Tokyo, as saying: “We want to build our own ’coalition of the willing’ in Asia to prevent China from just running over us.”

BANDAR SERI BEGAWAN — Competing claims to the South China Sea have for decades been a source of tension in the region.

China’s increasing assertiveness in staking its claim in recent years has caused concern for neighboring countries, particularly the Philippines and Vietnam.

The South China Sea issue will be a top priority for Association of Southeast Asian (Asean) leaders during their two-day summit in Brunei beginning on Wednesday. Below are key facts on the sea and the competing claims:

Geography

The South China Sea covers more than 3 million square kilometers (1.16 million square miles) on the western edge of the Pacific, with China and Taiwan to the north, the Philippines to the east, Borneo island to the south, and Vietnam to the west.

It contains hundreds of small islands, islets and rocks, most of which are uninhabited. The Paracel and Spratly chains contain the biggest islands.

Significance

The sea is the main maritime link between the Pacific and Indian oceans, giving it enormous trade and military value. Its shipping lanes connect East Asia with Europe and the Middle East.

Major unexploited oil and gas deposits are believed to lie under the seabed.

The sea is home to some of world’s biggest coral reefs and, with marine life being depleted close to coasts, it is important as a source of fish to feed growing populations.

Claimants

China and Taiwan both claim nearly all of the sea, while Vietnam, the Philippines, Malaysia and Brunei each have often overlapping claims to parts of it.

China’s claim is based on a historical map of “nine dashes” that approaches the coast of other countries.

Name

Beijing and most other countries know it as the South China Sea. Hanoi calls it the East Sea and Manila officially refers to it as the West Philippine Sea.

Occupation/Control

China has held all of the Paracel islands since a conflict with South Vietnam in 1974 that left 53 Vietnamese military personnel dead.

Vietnam is believed to occupy or control more than 20 of the Spratly islands and reefs, the most of any claimant.

Taiwan has a garrison controlled by its coastguard on Itu Aba island, which is called Taiping in Chinese and is the largest in the Spratlys.

The Philippines occupies nine of the Spratlys, including Thitu island, the second largest in the area. The Philippines has a military presence and civilians living on Thitu, which it calls Pagasa.

China occupies at least seven of the Spratlys including Johnson Reef, which it gained after a naval battle with Vietnam in 1988.

Malaysia occupies three of the Spratlys. The most significant presence is on Swallow Reef, called Layang Layang Island in Malaysia, where it has a naval post and a diving resort.

Brunei does not occupy any land formation but claims a submerged reef and a submerged bank in the Spratlys.

Tensions – China/Vietnam

Aside from the 1974 battle for the Paracels, the only other major conflict occurred when Vietnam and China fought a naval battle on Johnson Reef in the Spratlys in 1988 that left 70 Vietnamese military personnel dead.

However, Chinese naval vessels have fired at other times on Vietnamese fishing boats in the area.

In June last year, Vietnam passed a law proclaiming its jurisdiction over all of the Paracel and Spratly islands, triggering Chinese protests.

At about the same time China announced it had created a new city, Sansha, on one of the Paracel islands, which would administer Chinese rule over its South China Sea domain.

Tensions – China/Philippines

In 1995, China began building structures on Mischief Reef, within the Philippines’ exclusive economic zone.

Tensions between the two nations started to rise in 2011 when Chinese vessels harassed a Philippine-chartered gas exploration vessel at Reed Bank.

The Philippines then accused the Chinese of a pattern of intimidation, including firing warning shots at Filipino fishermen and laying buoys around Philippine-claimed islets.

A stand-off between Chinese and Philippine vessels that began in April last year at Scarborough Shoal further inflamed tensions. The Philippines says China has since “occupied” the shoal, keeping vessels there.

In January this year the Philippines asked a United Nations tribunal to rule that China’s claims to the sea were invalid. China refused to participate in the legal proceedings, which could take years to complete.

Diplomacy

The 10-member Association of Southeast Asian Nations and China adopted a non-binding “declaration of conduct” in 2002 to discourage hostile acts.

But attempts to turn it into a legally binding “code of conduct” have failed.

The dispute has created divisions within Asean. A meeting of foreign ministers last year ended for the first time in the bloc’s history without a joint statement because of infighting over the issue.

Meeting host Cambodia, a China ally, rejected a Philippine push for the statement to take a harder line against the Chinese.

The Philippines has said it will again push at the Brunei summit for a code of conduct to be signed as soon as possible.

BANDAR SERI BEGAWAN—Southeast Asian leaders will meet in Brunei on Wednesday hoping to heal wounds from infighting over relations with China, while building momentum towards groundbreaking economic partnerships.

The annual summit of the 10-member Association of Southeast Asian Nations (ASEAN) comes after the bloc suffered deep splits last year linked to territorial disputes with China over the resource-rich South China Sea.

Asean members Brunei, Malaysia, the Philippines and Vietnam, as well as China and Taiwan, claim parts of the sea, which is also home to some of the world’s most important shipping lanes as well as rich fishing grounds.

But a push by the Philippines and Vietnam for Asean to send a united message to an increasingly aggressive China crumbled amid resistance from Cambodia, a close Chinese ally that held the rotating chair of the bloc in 2012.

Senior Asean figures emphasized ahead of the two-day summit in Brunei’s capital that the group, which for more than four decades has operated by consensus, must work hard to find common ground on the South China Sea issue.

Asean leaders will make a united call in an end-of-summit statement for talks with China on the issue, but they will avoid any strong language, according to a draft of the document obtained by AFP.

“We reaffirmed our commitment to ensuring the peaceful resolution of disputes without resorting to the threat or use of force, through friendly consultations in accordance with universally recognized principles of international law,” the draft statement said.

The draft repeated a call made regularly by Southeast Asian countries for an “early conclusion” on a legally binding code of conduct for the sea between Asean and China.

But the draft made no mention of when they would hope to clinch a deal on the code.

Brunei had said one of its priorities as this year’s Asean chair was to see the code of conduct, initially proposed in 2002, agreed by the end of the year.

However China, which prefers to negotiate directly with individual countries rather than a united Asean bloc, has refused to begin meaningful talks on the code, and has given no indication it is willing to start negotiations soon.

Philippine President Benigno Aquino indicated on Wednesday that he would keep the pressure on his Asean colleagues over the issue, telling reporters in Manila that he would argue a code of conduct needed to be signed “as soon as possible”. Feuds over how to deal with China overshadowed most senior-level Asean meetings last year.

The Philippines and Vietnam are the most vocal critics of China, while Laos and Cambodia are regarded as Beijing’s staunchest allies in Asean.

Asean leaders have said that one of the other key issues on the agenda during the Brunei summit is pressing ahead with deeper economic integration within the bloc, and with other countries in the region.

The leaders are set to announce that Asean will begin negotiations next month with China, Japan, South Korea, India, Australia and New Zealand for a giant free trade pact, according to the draft end-of-summit statement.

The Regional Comprehensive Economic Partnership (RCEP) aims to tie together Asean’s free trade agreements with each trading partner, which would account for a third of the world’s economic output, and is being strongly backed by China.

Asean hopes to conclude the RCEP deal by the end of 2015, the same time as a single market for the 10 Southeast Asian countries is meant to be finalized.

The ASEAN Economic Community is one of the other top items on the agenda in Brunei this week.

The leaders will note in their end-of-summit document that 77.5 percent of the community’s blueprint has been mapped out, according to the draft.

Brunei’s Sultan Hassanal Bolkiah will host the summit at the prime minister’s new office, a dome-topped building with a forest of enormous pillars inside made of marble imported from Italy, and other extravagant features.

The event begins with a leaders’ dinner on Wednesday night, followed by meetings throughout Thursday.

BANDAR SERI BEGAWAN—The two-day summit of the Association of Southeast Asian Nations (Asean) opened here Wednesday night with the Philippines looking to Brunei to push for an early conclusion of talks with China on a code of conduct in the South China Sea.

The summit chairman, Sultan of Brunei Haji Hassanal Bolkiah, opened the summit by hosting a dinner for the nine other Asean leaders, except for Malaysian Prime Minister Najib Razak who sent a representative, at the spanking new Prime Minister’s Office.

Pushing for code of conduct

President Aquino, who arrived Wednesday night for the opening, said he would push again for the code of conduct to minimize the risk of conflict in the South China Sea, which the Philippines refers to as West Philippine Sea.

In a departure statement in Manila, Aquino said that under the sultan’s leadership, “we have full confidence we can move forward on equal terms on this issue.”

“That is one of the aims of the President: to push for the code of conduct in the South China Sea,” Philippine Ambassador to Brunei Nestor Ochoa told reporters at the Philippine Embassy. “This time, we are hopeful that Asean will finally agree to have a consensus in pushing for the code of conduct at least within the year.”

Retreat Session

Today, the leaders will attend a Retreat Session, whose agenda is expected to include overlapping territorial claims over the South China Sea between Asean and China, and the tension in the Korean Peninsula.

The Philippines would push for the full implementation of the Declaration of the Conduct of Parties in the South China Sea, and for the early conclusion of a “substantive and legally binding” code of conduct, foreign officials had said.

Ambassador Elizabeth Buensuceso, Philippine permanent representative to Asean, indicated that Manila was looking to Bandar Seri Begawan to take the lead in pressing for negotiations on a code of conduct with Beijing.

“In this summit, this issue will be tackled. I think the chairmanship of Brunei would like to be able to come up with a statement that is constructive toward maintaining peace and stability in the region,” Buensuceso told Radio TV Malacañang.

Since the format of the summit is informal, and the leaders could raise any issue, she added: “We’re not going to rest on our laurels. In this summit we will urge the Asean-member countries to be forward-looking.”

Ochoa agreed that Brunei’s goal would be to push for the code of conduct during its chairmanship of Asean.

“They (Brunei) hope that something would happen to the code of conduct before the end of the year,” he said. “So far there’s no formal consensus yet. Hopefully, Asean will agree among themselves and China is next.”

In the Retreat Session, the Asean leaders would exchange views on regional and international issues, and discuss the Asean community in 2015, its central role and regional architecture, and its future direction.

The Asean leaders would call for an “early adoption” of the code of conduct with Beijing, according to a draft statement to be issued after the summit obtained by The Associated Press.

A code of conduct has been on the agenda of Asean for the last 10 years. China has balked at this, claiming the time wasn’t ripe for it, and preferring to deal with individual claimants.

Asean countries have already crafted the “elements” of the code of conduct, but it was another matter to convince Beijing to sit down at the negotiating table.

South China Sea is being claimed whole by China, and in parts by the Philippines, Brunei, Malaysia and Vietnam, as well as Taiwan.

The Philippines has challenged China’s claim over most of the South China Sea by filing a notification and statement of claim with the United Nations.

Meantime, the Philippines has to deal with the presence of three Chinese surveillance ships in Scarborough Shoal (Panatag Shoal) despite an agreement by both countries to withdraw from there following a tense standoff in April last year.

Filipino officials view the continuing incursion as a violation of the code of conduct, a 2002 nonaggression pact that has failed to stop clashes in the South China Sea.

P7-million trip

The government allotted P7 million for President Aquino’s attendance at the summit in Brunei. He will spend less than 24 hours in Bandar Seri Begawan, accompanied by a 51-member delegation, Executive Secretary Paquito Ochoa Jr. said.

NEW YORK CITY—US Secretary of State John Kerry on Friday urged China and its Asian neighbors to resolve their territorial disputes over the South China Sea as swiftly as possible.

“Your region is home to the world’s busiest ports and the most critical sea lanes. So stability where you live matters deeply to prosperity where we live,” Kerry told a meeting with Association of South East Asian Nations (Asean) foreign ministers in New York.

“That’s one of the reasons why the United States is so committed to maritime security, to the freedom of navigation on the seas, and to resolving the disputes with respect to territory and achieving a code of conduct,” he said.

“This is going to require respect for international law and unimpeded lawful commerce in the South China Sea,” he added.

The top US diplomat urged the Asean members to “move as swiftly as possible to reach a binding code of conduct for addressing disputes, without threats, without coercion and without use of force.”

China claims almost all of the South China Sea, including waters and islands close to the Philippines, Vietnam, Brunei, Malaysia, Japan and Taiwan, greatly intensifying regional tensions in recent years.

Earlier this month, Beijing warned the United States not to support its neighbors’ claims to disputed islands in the East and South China seas, and to stay out of the rows. The Philippines calls the waters off its coast the West Philippine Sea.

US not taking sides

Washington has always refused to take sides, but is keen on seeing its Asian partners adopt a code of conduct for navigation in one of the world’s busiest shipping lanes.

Beijing has been reticent to negotiate with a regional bloc, though consultations with Asean on a code were held in China recently after years of delay.

Sino-Japanese ties have soured dramatically since Tokyo nationalized some of the Senkaku Islands, which Beijing claims and calls the Diaoyus, in the East China Sea a year ago.

Speaking with The Associated Press at the United Nations (UN) on Thursday, Foreign Minister Marty Natalegawa of Indonesia, the largest country in Asean, said there was broad consensus on the goals for a legally binding code, but he declined to set a deadline for completing it.

He said the nations were discussing preliminary steps to build confidence, like setting up communication hotlines to cope with security incidents.

Without naming any country, Vietnamese Prime Minister Nguyen Tan Dung spoke in stark terms Friday about the territorial disputes in the South and East China seas. “Just one single incident or ill-conceived act could trigger conflict, even war,” he told the UN General Assembly.

Over the past year, Japan’s coast guard says there have been scores of intrusions by Chinese vessels into Japanese-claimed waters near the islands in the East China Sea.

“The incursion by Chinese government vessels in our territorial waters is continuing, much to our regret,” Abe said Friday through an interpreter. “We have been dealing with this issue calmly and resolutely, and we shall continue to do so.”

President Aquino is set to attend nine meetings at the 23rd Association of Southeast Asian Nations (Asean) Summit in Brunei next week but has arranged no bilateral discussions with China, which has occupied Scarborough Shoal and lays claim on Ayungin Shoal in the West Philippine Sea (South China Sea).

MANILA, Philippines—President Aquino is set to attend nine meetings at the 23rd Association of Southeast Asian Nations (Asean) Summit in Brunei next week but has arranged no bilateral discussions with China, which has occupied Scarborough Shoal and lays claim on Ayungin Shoal in the West Philippine Sea (South China Sea).

Foreign Affairs spokesperson Raul Hernandez said on Wednesday that the Philippines would stick to its position that the territorial dispute would be best resolved in the arbitral tribunal and the completion of a Code of Conduct (COC) on the South China Sea by the 10-member Asean.

“It never came up in our meetings,” Hernandez said when asked at a briefing in Malacañang whether there were efforts to schedule a bilateral meeting with Chinese leaders attending the Asean.

Hernandez reiterated that the territorial issues between the Philippines and China “are being addressed in different fora,” referring to the ongoing arbitration and the completion of the Code of Conduct.

Relations between the Philippines and China have been strained owing to the two countries’ dispute in the West Philippine Sea.

Last month, Mr. Aquino skipped the China-Asean Exposition (CAEXPO) despite the Philippines being the “country of honor” because of the conditions set by China over the territorial row, which the Philippines would not agree to.

It is uncertain whether the 10-member Asean would be able to complete the code of conduct at this summit, considered an important agreement that would settle regional issues in the resource-rich maritime area.

Aside from the Philippines, other Asean nations laying territorial claim in parts of the South China Sea are Malaysia, Vietnam, and Brunei this year’s Asean chair.

“We are hoping that the negotiations would be expeditious and that we are able to come up with the COC as soon as possible in order to manage the tensions in the South China Sea,” Hernandez said.

Hernandez added that the Philippines has not yet filed a complaint against China over its installation of concrete blocks in Scarborough Shoal, discovered by the Philippine military last August.

“We thought that to address this issue, we will focus on the expeditious conclusion of the COC on the South China Sea, and in preparation for the memorial for the arbitral tribunal or the arbitral proceedings,” he said.

The “memorial” refers to the pleadings and arguments on the case filed by the Philippines against China, which should be submitted in March next year, Hernandez said.

President Aquino would be participating in the 16th ASEAN-China Summit, aside from the 23rd ASEAN Summit, 16th ASEAN-Japan Summit and the 16th ASEAN-Republic of Korea Summit, and the 1st ASEAN-US Summit.

Mr. Aquino would also be at the 16th ASEAN Plus Three Summit, the 8th East Asia Summit, the 11th ASEAN-India Summit and the 5th ASEAN-UN Summit.

Aside from the territorial row with China, central to the ASEAN Summit meeting would be the one ASEAN Community by 2015.